Following the decision by a group of investors to quit the tobacco industry, should others follow suit?

Q: Following the decision by a group of investors to quit the tobacco industry, should others follow suit?

YES – Adam Tindall, chief executive of AMP Capital.

Investors are increasingly – and quite rightly – being asked to justify their actions. Clients question whether investors should support an activity that, while commercially convenient and legal, is inherently wrong. This is partly what drove our decision to introduce a new ethical framework, which resulted in the exclusion of tobacco manufacturers from our investable universe. We’re not prepared to deliver investment returns at any cost to society. Tobacco products are highly addictive, cannot be consumed safely and impact non users via second-hand smoke. We believe in company engagement to effect meaningful change but no engagement can override the inherent dangers involved with these products. Many clients told us they don’t want to be invested in harmful products. Our analysis determined our funds can still meet their investment objectives without tobacco securities. Based on the positive feedback we have had on our approach we believe that other investors will make similar moves in the future.

NO – Sam Bowman, executive director of the Adam Smith Institute.

Since the emergence of e-cigarettes, Big Tobacco poachers have turned gamekeepers. Public Health England says that e-cigs are at least 95 per cent less harmful than cigarettes. Nearly 3m people use them, nearly all current or ex-smokers who use them as a safer alternative. Yet only 13 per cent of the public realises that e-cigs are much safer, and many smokers do not enjoy e-cigs so will not switch. That’s where the tobacco industry can be useful: it has plowed money into products like Phillip Morris’s iQos which heat the tobacco but do not burn it, producing an experience closer to smoking without the actual smoke. Products like this require massive investment and marketing budgets – iQos has cost £2.4bn in development so far. But the incentive is there: smokers want the nicotine and the flavour without the tar. If we get out of the way and let the private sector give that to them, billions of people’s lives will be made better.

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